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here's what we're following form socgen pulls its money from the emballotsed hedge fund. kate kelly will have more on the next. saving face, fresh off the best month since the ipo facebook stock is higher yet again today on word it would be added to the nasdaq 100. should i buy it here in two traders, with you heated debate is just ahead. apple is falling and falling fast. having it's worst day in more than one year. let's get over to mary thompson. a lot of reasons it's down. we do want to note, though. cnbc chatted with jpmorgan la

sards, as well as morgan stan think. there are no plans to raise the margin requirements on apple. of course, investors keeping the watch on -- which would push apple below the 200-day. apple down almost 4%. scott, back to you. >> do you buy this? is this the reason, because of the margin requirements, or is this profit-taking as you near the end of the year. the fact they haven't announced a special dividend? what is it. >> time is starting to run out, but i do think a lot has to do with the records about some of these margin requirements. i think this would be a huge problem for apple. whether or not that's actually true and something that will go through the try is a different question. i haven't seen a reason yet necessarily to buy the stocks.

>> steve wise, what do you do with apple? at least it's bounced a bit off that intraday. people throwing around the death cross as well, so everybody seemingly has a reason for why the stock is in trouble today. >> it's so much fun to argue and disagree with him, but i don't think that has much -- i think everybody is -- a lot of people are getting worried that have been in the stock for a long time about the taxes next year, the headlines, sell, sell, sell, old newspapers, business daily, so taking profits. simple. >> joe terranova was sitting right where you are yesterday, that he had trimmed the timing

certainly seems to be -- >> there's no rush to buy, is the bottom line. >> the technicals don't look that good, absolutely that's the case, but in addition to that, the stock has missed earns two straight quarters. you need to see apple perform in the coming quarter. >> you buy it here? >> i think a lot of this stuff gets important, but the chatter about the firm today, how much apple could be sitting number one. what we're doing here is taking price and trying to retrofit it with fundamental reasons where maybe some don't exist. a lot of it is mechanical, as some of the other guys have mentioned. with huge gains, you have uncertainty in terms of what the tax ramifications are to hold this into january, so why not trim, especially giving the b bottom that this stock has had.

it had a huge snap back. none of that is fundamental. >> we're talking about a 4% move to the downside. >> for a stock, though, ped -- >> well, maybe not -- i think it's reason for us to talk about it, but at the same time if you trim off one of the digits and we're looking at it, wow, it's down 4% -- it's a $23 move on a $500, $600 stock, before we start saying the reasons, let's kind of keep some perspective on apple. >> thanz fine if you just woke up and were looking for stocks today, looking in a vacuum. the to be's in bear market territory. it's a much more significant correction. i agree 4% doesn't mean a lot. >> an opportunity on appear 8, you don't care about death crosses or margin requirements.

you have a -- >> i disagree, i think apple is a value stock, no longer a growth stock. now you have to analyze it. now at this point, the new products aren't that innovative, so it requires some analysis. >> when you have the dow jones industrial average right now at the highs of the dayer we're up 126 points in case you're looking at what the stock market is doing here. there's a look at the dow, plus 125, almost a 1% move, the s&p 500 is having a great day as well. there it is. that's a half% move, so not quite as powerful as we're seeing on the dow. the nasdaq, a different story. the nasdaq is lower, almost 1%, but at least for today, there's a disconnect that apple can go down and the broader stock market can go up. henry blodgett joins us from new york city. good to see you as always. >> thanks for having me.

>> and obviously this is a stock that people have tremendous profits in, so to the extend they want to take advantage of lower capital gains, that makes more sense. more fundamentally, they're in sort of a product hold here. they bakley came out with everything in the last few months, we're going to go through this period where they probably won't have anything exciting to announce for a while, now the television has been delayed unit next fall, according to gene muenster. then growth is slowing, and more importantly the margin is likely to compress. that's the big thing that worries me. they're going to go to a lower marge margin of mix products. it's hard to see stocks rise in the face of a compressing market.

you have downside protection unless the thing completely falls apart. so i think the valuation is actually help 68 here. >> if apple has a disappointing season, where does the stock go? >> i don't know. i think it would certainly go down. the iphone numbers have been creeping up. 40 to 50 million sold this quarter. we get into the first quarter, there's not a lot to look forward to, so i think you could see a sell-off there, but again 12 sometimes earnings, that's basically a market multiple. this company is growing faster than the market. you can say everything bad than -- still probably will gro faster than the market, so valuation looks supportive. >> trying to push, though, against the tide of changing perception, where psychology can be tough. is that really what's at work here? >> i don't think so. i think stepping back from it, again, there are a few different issues. steve jobs, this is the first year next year where we're really in the post-steve jobs era.

we have the margin mix, slowing growth. you would expect multiple compression on that, but don't forget they come out with a big product our big number, psychology can change in a minute. >> if you take a look at the sector they play, they're selling at a significant premium so the com uponants of their business, whether it's smartphones or whether it's pcs. granted they're macs, not p.m. cs, but they're selling down six, seven times. >> totally fair, but i mean, look at dell and look at hp versus apple. every single business apple has is growing very nicely. they have a wonderful new phone out there, the smartphone market has tremendous growth. >> i agreed. i just think you have time. for the first time we're seeing the steve jobs premium as you

mentioned come out of the stock and wonder what's next on the product cycle. >> if you say you have time, you've got time. >> well, thank you. >> how diplomatic. henry, good to talk with you as always. thanks for coming on. >> thank you for having me. >> again we were talking about apple having at one point today the worst day in more than a year. but that's not having a profound impact on the overall stock market as the dow and s&p are at the highs of the day in part being led by financials. as you probably heard already, citigroup announcing massive job cuts of 11,000. on the other side of the break we're going to bring in the noted bank analyst mike mayo. he has a long history covering history, so you'll certainly want to hear what mr. mayo thinks. on the other side of this break. much more ahead on "halftime report."

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well, facebook gets invited to join an exclusive including, the nasdaq 100, made up of the 100 most valuable non-financial stocks trading on nasdaq. is it a must-own company or is it a sign that it's topped. >> about $23 a share. now you have this nice up trend, a big base built over the summer. the institutions have come into this name and they're bound to buy it. >> why the take? >> here's why you -- a lot of technical analysis is

backward-looking, so we know where it's come from. the stock was oversold, now it's overbought, bid up by a lot of trader. virtually every one i read is into the inclusion. that's why the stock is not doing more. so i think that right now, you want to sell it, take your profits, the mobile strategy is still no further along. we're seeing the ad market start to erode in terms of stocks that have come out. pandora said ad spending will be down. major advertising companies have come out saying ad spending is down. >> let me jump in a moment. i agree. you don't buy this because of inclusion. no one is -- >> i'm not saying that's why you should or shouldn't buy it. >> let the enthusiasm dry up a bit, buy it closer to 26, not 28. as long as it stays above 25, you have a set risk/reward. if it breaks 25, the situation

has changed a bit. this stock has never been about valuation. it's always been magical. when the magic wore off, you could not be in -- that the magic is back, totally greater, you play it with a tight stock. i think the risk/reward is phenomen phenomenal. >> that's speaking to my case, too. >> certain stocks -- >> there are certain stocks pure in the market, don't forget that amazon got crushed. trade down to the teens. it got cheap then, now it's expensive. >> never a valuation play amazon, neither will facebook. we're going to make that the last word. you have heard the cases. pete, who made the more compelling argument? >> unfortunately i'm biased, because i own facebook. i was listening to josh's comments. i look at the revenues from the

mobile, the fact they went from 0% to 14%. the sponsored stories seems to be the huge growth area. for a variety of reasons i think it was oversold at 20. i think 27, 28, i think it's probably fair, but if any inclusions come into the place and actually we start to see that with facebook, i think think thing is over 30. >> you made a great call with this one. you said it was poised for a technical breakdown. in fact it started moving higher after you said that. >> i think facebook is to be bought on selloffs. >> i think it looks much better. >> i wouldn't buy it here. >> after the company announced it was trimming 11,000 jobs as part of a cost-cutting effort.

mike, thanks for -- >> thanks for having me. >> if i'm correct, you upgraded citi to a buy. so what's your reaction to this move today? >> this is the first time. i think this goes a great start to the new ceo at citigroup, but not enough. what i mean by that, this is a significant restructuring, the new ceo took off the big issue is not what -- but what they'll do for the next 5 to 10 years. for that i think they need a more radical business restructuring. they need to do that before the annual meeting april 16th. just on monday, i med with a shoat activist, trillium asset management in boston. they have a shoat referendum that would require citigroup to analyze breaking up the company

and reporting back to shareholders on the results of that this is a step in the right direction. >> you have said, and these are your words that it's a culture there where shareholders don't matter enough does this move tell you that citi is paying more attention to the shareholders than perhaps it has in the past, at least in your mind? >> exactly. >> i think this is a message that the new ceo has obviously gotten early on this year. let's take better care of the shareholders. the stock is up 5%, but in look of this shareholders activist group. they manage money for religious groups, manage money for nuns, and they bought their shares in 2004. since then they have lost 90% of their values, so when you say a stock is up 5%, it's really only a step in the right direction.

a more radical restructuring is needed for sustainable growth ceos numbers 1 through 4 didn't get the job done. the only way that 5 is likely to get the job done is more radically restructure the business. that's what we need to see before the annual meeting. >> if they're not willing to perhaps make even deeper cuts, which some people say still needs to happen. does that change the way you would look about this stock, considering the fact that, as i said, you just upgraded it a little more than a month ago? >> it will definitely change the way i would think about the company. it's not enough to simply downside. at certain points you need to exit businesses to get the multiplier effect, the benefit to expenses by eliminating more back office operation. they're doing some of that now. having said that, i think citigroup will feel compelled to do more. what you have here with the

activist group is come january, i expect the s.e.c. to approve the referendum. in february, the activist group will be lobbying other big shareholders to get their support. so you'd have four events in the first four months of next year, so how apropos for a show such as "fast money." we will have a lot of money going into citigroup given these expected events between now and april 16th. >> i can't let you go without bringing up bank of america, because the traders are excited about this break. from a technical standpoint, fundamentally moynihan has mentioned he's more than ready for the coming stress tests. we've seen it as a catalyst. would you want to be long bank of america headed into that, or you think this breakout is a bit premature and not ready for primetime injure yet? >> the name you want to own

right here right now is citigroup versus bank of america. citigroup has a xharm and new ceo that's willing and able to take the tough actions for sustainable growth, i think, and he's had some positive indication of that today. i do think citigroup will finally be able to have a material dividend increase and you'll see that again by april. this is good news for citigroup. that's the name you want to own here. >> can you imagine you saying those words a few years ago? >> it's been a long time, but new ceo, new chairman, a new philosophy, i think, and we'll still be playing close attention. >> thanks so much for coming on. >> mike mayo, what do you do? >> i own citi, i disagree with both moynihan has done the right things there. i think the stock goes a lot

higher, and it's much easier to understand that citi at this point. 6 on% of book value, that sock should trade about 80% of book. st. is also compelling as we. let's kick it around the desk a bit. if you had to choose today between st. and bank of america, which one? >> bank of america right away. i like what moynihan said about simplifying the mortgages, making that process simpler. that's where we see the most badge for our buck. if you look at the december calls and look at the ten strike, you talk about the ten levels, talking about the ten level, 250,000 plus options on open interest. people have been betting for this move. they're getting rewarded today. i think it doesn't stop at ten, if it can close above 1020, i think 11 is in the cards. >> i'm with mayo. i think it's a far better own. all right, coming up, investors turning up the heat. cnbc's indicate kelly gives us

the details on the embattled hedge fund next. goldman sachs lowers its goal forecast. is the move justified? we'll good to the pits to find out, when we come back. bob, these projections... they're... optimistic.

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kate kelly has the later on the fallout. you've been working this story hard. >> i have. we've just learned that citigroup's private bank has put s.a.c. on its watch list. i'm told putting it on review, which means the bank is monitoring situations is something the bank does tend to do when a stock -- a fund is facing any sort of reviews, much like a stock. still it heightens the pressure whose founder steve cohen has been personally implicated in a government case alleges insider

trading. cnbc was first to report on a investor redemption, and since then at least one other big -- has followed suit. other investors are showing concern and we may see more outflowing given the next redemption is around february 15th y thbs has learned the flagship is up nearly 12% year to date against an average head fudge return of about 2%, 3% overall. add the fact that cohen has said he's confident that he and his company has named appropriately, there's still quite a lot arguing for these guys. >> important to note when we do this story every time. cohen himself hasn't been charged. >> correct. >> s.a.c. hasn't been accused. >> only a subsidiary uchbt. >> this was a former portfolio manager who worked for that

unit. >> correct. >> at what point -- who has to pull their money for it to get people to notice. >> here's the key point. all of this has symbolic value, and i think this has turned a corner for people psychologically. i do have cohen allegedly involved in this decision, even though we don't know what he knew, we don't know if he knew there was alleged insider trading involved, but the fact that he's personally alluded to they have been warned, those two things are key. now, steve and his other colleagues have about $8 billion action maybe more than that out of the total $14. it's a stable capital base. he continues to trade quite successfully but at the same time i think people worry what if cohen was forced to resign. >> we've talked about that before, the possibility as some people say, he may be willing to

walk away, why do i need this? >> there's that. two years ago he was in "vanity fair" talking about this, talking about back issues and health issues, so there may be reasons having him want to move on, but the key here is the risk. >> gold is easing a bit after goldman sachs sit its price forecast how is the call being received? let's go to jackie deangelis, the host of cnbc's "futures now." nice to see you again. >> goldman is now predicting that gold prices will lose their momentuming cutting the targets to 1800. are they right? has gold seen its best days? rich is at the cmc in chicago, anthony is at the nymex. here's what goldman said in improving the outlook will -- and the cycle in gold prices will likely turn in 2013.

rich, do you agree with that, a stronger economy will take qe away and how serious a threat is that to gold? >> listen, a better economy absolutely will put the top in gold, but i think it's too early to call. we have geopolitical risk. we're talking about fiscal cliff, and we're forgetting about the weak economy in the uk. there are two things that i'm watching. i'm looking at central banks around the world constituent adding physical gold to their coffers to the opportunity of 400 tons. and a new investor class, the etp, investors holding 2600 tons of gold and the fourth largest holder. so when i start watching, if we start reducing those levels, maybe the top is in. by the way, the dollar is closer to the lows than it is to the

highs, so keep an eye on the dollar as well. >> okay. it sounds like it's too early to call in your view. let's look at what goldman is cowling for. they're cutting their 3, 6 and 12-month targets. do you agree with those levels where you see it going long term and short term? >> jackie, you know, the numbers we have to watch right now, i don't know if i necessarily agree with those numbers. but the numbers we're looking at right now are the numbers we have covered on this show a few times. it's 1675 to 1672. that's the big support there. if we get through that, we'll see 1600, maybe even 1530. on the down side resist atat, and that big number of 1800. with qe still going on, there's been no call for it, gold will go higher. >> so still bullish in your view. now you know what our guys are thinking. the question is, what about you?

log-on to futuresnow.with respect with respect. vote in the poll. and also and waffle us more. back over to you. >> jackie, still on deck, are stocks on the verge of giving you a losing hand? we turn to one of wall street's newest bears. and surf's up. when to let go of a winning stock. two stocks you may want to bail on when "halftime report" returns. next, we cover the day's bounces, the island reversals, breakouts and breakdowns in "pops & drops." plus they say the dumb money trades in the morning and the smart money trades into the close. so we reveal what that smart money is buying and trading before that final bell tolls, when "halftime report"

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welcome back to "halftime

report." i want to go over the nasdaq. seema? >> white horse financial, a company that was set to ipo and trade here at the nasdaq apparently the ipo has been delayed. apparently there was some sort of human error, someone they market watch inadvertently hit the halt button instead of the extension button. the nasdaq has said no shares actually traded hands. they will announce shortly on the time frame when the ipo will resume. postponed due to what the nasdaq says was a human error.

coming a big off the lowest levels of the day. so we continue to follow this story. >> people do not hang around for 17 cents. if you haven't sold it already, understand there was a secular change in the way human beings buy things. freeport mcmoran buys two oil companies. for a total of about $20 billion. weiss? >> it's getting destroyed. i'm out of about 80% of it last time i looked. the best thing can say about what jim bob moffitt did, he's

did i luted some of the international issues. they've had strikes even violence at some of the mines it used to be the go-to place for copper. so maybe the valuations are appropriate now, i think you have to wait for this to settle out. >> pandora is plummeting on a weekout lied. telling us a short time ago that -- stocks getting absolutely hammered today, down 17%. >> the management actually had a misread on this as well. they had been bullish not too many months ago. they're actually looking very bearish. the advertisers are pulling back as well.

the potential for competition with apple is another issue they'll have to deal with. for all these reasons, the stock is getting hit hard. so it had a big run, but unfortunately they have to show us the money. >> highs of the day, plus 125 citi is a big winner. given that oil is down. oil is off about 30 cents or so. so the highs of the day, b.a.c. bold predictions today. jena mart tend-adams joins us with the details of the outlook. nice to see you. >> nice to see you, too. thanks for having me. >> what's the outlook? >> lovettly we've had -- we got some fundamental and technical signals to shy away from some of the more cyclical components and

we're just finding the signals continue to worsen. we're looking for a -- by end of year next year, more pressure in the first half of the year, maybe a bit of a reprieve, but a lot of contingencies on policy. >> just seems like everybody is trying to make a forecast for the end of the year given what we're watching with the fiscal cliff. can you -- i mean, if you're basing your projections in part on the data that you're looking at now, is it quite possible the data is unreliable because it's just moving so volatile based on what the fiscal cliff is bringing us. and assuming that people do the right thing and get a deal done? we're better off than we think? >> i take your point. it's absolutely possible in the short run we may see some volatility related to concerns around the fiscal cliff, but in reality the economic deteriorate

started a year ago. capital spending declined in the third quarter, but really started to deteriorate in the july/august period well before the fiscal cliff concerns became center stage. i think those economic detier a's, components probably lead to reduced employment, and reduced consumers spending starting in the first quarter. this is an economic deterioration, probably amplified by the policy concerns, but nonetheless that has occurred, and is forcing our earnings numbers lower. we're now at 10 as a good example. >> you've managed to make adam parker look like a bull. you're looking for 1390 in the s&p for next year. he had 1167, but he's looking to

1434. >> so far, i think there are a number of folks that have yet to come out, but unfortunately we have to live with that status for a while. quite frankly investors are not being paid a ton. we start to rebound -- we'll have to get more optimistic. good to talk with you as always. >> thanks for having me. >> see you soon. what's going on with this rally? up 125 on the dow. so the kind of stocks that are moving today? >> i think it's really important to keep in mind so much of this year, when they write the textbook entry on this year it will be the disconnect between economics and markets we continue to be in an environment where people don't have a great

many opses. that's why these options that look so threatening action they reverse so quickly. as long as that continues to be the case. they're going to -- >> it's very simple. last night it came out that. >> i'm going to make it simple here, not for the viewers. they came out and ticked four tea party members. that took them -- some republicans are willing to adopt a much more done scilla torrie approach. that's what's driving the market. it's going to continue to drive the market. >> you're saying this is cliff driven? >> absolutely. ivities market wasn't doing all that much. the president made some comments today in front of the business roundtable.

all of a sudden, we start to do explode to the up side a bit. guys, i know the music is playing, but there's a look at hewlett-packard. up 4%, pete. >> absolutely. >> there are areas you talk about, last thing is technical, look at the xlf. up next, the probability that lawmakers will defy if the odds, and hammer out a fiscal cliff. if we want to improve our schools...

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good afternoon from the world headquarters of cnbc, on "power lunch," the fallout from citi, thousands of jobs being cut, but the stock moving up. where does the bank and its stock price goes from here. "forbes" out with the most powerful people list, not richest, including the trailblazing ceo of the magazine who says people aren't paying enough taxi to. problems for the dreamliner. how big a problem are this? now back to scott. so see you in about 12 minutes. based on cnbc's rise above meter

p. the likelihood of a deal getting done now stands at just 25%. larry mcdonald joins us with his latest analysis. larry good to see you again. welcome back. >> good to be here. >> we're at plus 126 on the dow, yet the cnbc meter says 25. what's your take? >> well, most interesting, my 17 lehman systemic risk indicators are 50% below the may levels, but my economic indicators have deteriorated dramatically the last 7 to 10 days. if you look at gold, you look at oil, you look at the perform abof treasuries. we've had a rally in the s&p. treasuries have not sold off, then you have a situation where anything consumer sensitive has been selling off, but most importantly, if you look at the relationship between the two-month vix future and the

eight-month, i put out a note on friday, it's been moving into the shorter-term vix future, that's been a short-term bearish sign. >> how does the fiscal cliff get resolved? how much patient does the market you have, do you think to deal with the daily sound bites out of the d.c. moving.markets and ? >> lawrencegmcdonald.com. comments are very interesting around boehner taking those actions around tea party members in the house. that's substantial. i think at the end of the day it will all come down to means testing. means testing on dividends, means testing on medicare, means testing on social security. that's the way they come to agreement. if you add up all the means testing moves on social security an medicare, that gets but $800 million right there. >> what's the cliff doing to gold? gold's been obviously an interesting trade over the last several sessions.

it's been down $30 or so a couple different times. cliff related or something else going on? >> i think it's definitely more economically related. if you look over the last year, take morgan stanley five-year cds versus gold. every time we've had a rise in systemic risk, gold has fallen. over the last month or so, the financial cds, big banks of the united states, that's improved. so there's less global systemic risk, less lehman like risk. but gold has been acting poorly along with oil. so a lot of the economically sensitive under -- indicators are deteriorating pretty fast in the last month or so. >> guys, trades base on what he said? >> he mentioned systemic risk going down. i think central banks have done a good job of reducing systemic risks. my problem is the market here is earnings and revenues over the last two quarters have been weak. when you buy stocks you buy a stream of cash flows represented

by earnings. i just don't see the bullishness putting all the fiscal cliff stuff aside from the corporate results. >> i completely agree. i think there is plenty of liquidity. what they did in europe was take pressure off banks. now you are seeing distressed assets get repurchased by their rightful buyers. the systemic risk thing is not things. thing is the earning recession or earnings cliff. i agree if you named the number one risk factor for u.s. stocks going into the year, the revenue growth game is over and it is really of it to manufacture profits the way we have in the last couple years. coming up, we stay all over what's driving the dow up almost 140 points. and if you like the smell of pepperoni, this new perfume may be for you. so anyway, i've been to a lot of places.

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welcome back. before we do "pops & drops," want to update you again on this market rally today. 125 points, dow has pretty much been sitting at the highs of the day for about the last 45 minutes. you've had bank of america, citi among big winners today from the financial space. energy stocks having a pretty good day. s&p is also up about seven points trading right now at 1,414. the nasdaq remains the laggard of the day. what an interesting day there it's been not only at nasdaq marketsite but an ipo that couldn't get out of the blocks. certainly what's taking place with shares of apple? let's throw up apple right here.

the nasdaq rebounding a bit but apple shares having their worst day in about a year. a significant loss for that stock. $24-plus for shares of apple in the losing column today. let's hit the biggest "pops & drops" in midday trading. hp. it's popping. >> yeah. this company was the victim of hate bashing party a couple of weeks ago on the autonomy acquisition. i think it was the sentiment low in the stock. it's up here. i prefer dell over hp though. >> waste management. >> if you're looking for a pe that is appetizing, it is a 15-year. dividend is 4.4%. goldman sachs actually cleaning dawn in the trash area from conviction buy on one of the names also lifted this thing as well. >> veriphone. >> jbs upgraded this to a $39. they will be strong. it is a strategically challenged situation. company was formerly very big into payments but now they've

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